iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
21,316 Blog Posts

There is ZERO Chance China Doesn’t Bailout Evergrande *

As we speak, investors are being packed tightly into train cars en route for VIX camp. I understand it’s quite wonderful and all of the people onboard the train have been assured by the train drivers that “VIX CAMP IS GREAT — free food and showers and a nice warm bed to sleep in, in addition to ample opportunities for work.”

Markets are shattered lower, with the NASDAQ off nearly 400 and everyone I know believes this is it — the end.

My only problem with this train of thought is the fact that, pardon me, but every single banking crisis since 2008 has been met with feverish central bank rigging. Oh, I bet you forgot when capital flows out of China were cause for pain and the Yuan was called into question and people sold down Asian stocks as if they were valueless.

Perhaps we are early in this rout and it is September, so there is room to breathe lower. But I am a veteran by now in trading market crashes and this does not have the hallmarks of true panic yet and I have PTSD from a decade plus of rigging, so pardon me as I express my wariness when I glance at your puts and your bulking VIX calls and see fire in your future, for the Chinese are not a free market and the Chinese are not going to permit $300b in debt go unattended — wreaking havoc on their banking system.

Worth noting:

Evergrande is due to pay $83.5 million interest on Sept. 23 for its March 2022 bond. It has another $47.5 million interest payment due on Sept. 29 for the March 2024 notes. The bonds would default if Evergrande fails to pay the interest within 30 days.

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7 comments

  1. emersonlakepalmer

    $83 million??? Peanuts…

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  2. flea

    CCP will bail out on-shore, but will laugh their @sses off at the miserable off-shore plebes going bust (~ 120B)

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    • Mr. Cain Thaler

      It’s an interesting question, isn’t it? Do the Chinese feel yet like they don’t need US / European financing?

      My guess is they still do, but they may not make us whole either. Just fill it in enough to send a message but keep hope alive.

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  3. og

    $130M doesn’t feel like a lot, but Xi seems like he’s been wanting people to feel pain lately.

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  4. edge

    Ouch. That hurt. Sitting tight though. This isn’t making sense to me.

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  5. fxtradepro

    This has been one of the most well prepared corrections I’ve ever seen. Every market journal, and every “Cramer” on T.V. has been yammering about this for the past 2 weeks. Shit, even CFTC NON COMMERCIAL positioning is short the market. Prepared. Now how deep, and who’s swimming naked that out there is the real question.

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  6. soupbone

    This has all gone too far long ago. A number of resets to cool the spending as opposed to one huge one is one way out maybe. There is so much excess. China offers up one such reset bring it on I say.

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